At 4:30 PM, an IMF worker who did not want to be identified was chatting with a colleague at his desk when a powerful blast hurled him against the wall and, he says, “everything went black.” A shower of window glass sprayed over him and “pieces of the roof fell on top of me”. The worker stumbled downstairs through darkness and dust, passing people lying gravely injured on the floor. “I saw one body, and many dying,” he said an hour after the blast, picking shards of glass out of his scalp, his blue work shirt splattered with blood.

The late afternoon attack on United Nations headquarters marked the deadly low point in a week of setbacks to the United States-led effort to pacify and rebuild Iraq. At least 20 people died and scores were injured when a suicide bomber apparently drove a cement truck packed with explosives past U.S. military checkpoints and smashed into the side of the hulking white headquarters, marked by the familiar blue U.N. flag above its main entrance. U.N. Secretary General Kofi Annan called the attack an act of “unprovoked and murderous violence.” Among the dead: special envoy Sergio Vieira de Mello, who was holding a press conference when the blast buried him under a pile of rubble. Coming in the wake of a string of other attacks–another American soldier killed yesterday by a bomb in northern Baghdad; the main pipeline transporting oil to Turkey blown up at the weekend by saboteurs near Tikrit; a water main, also in northern Baghdad, destroyed on Sunday, cutting off water to nearly half a million people–today’s assault underscores again the immense difficulties faced by coalition forces in their attempts to create order out of the post-Saddam vacuum. It belies repeated claims by U.S. chief administrator L. Paul Bremer III and other officials that life in Iraq is rapidly returning to normal. The blast will also undermine efforts by the coalition to restore basic services to the country–electricity, oil distribution, phone services, water–because those efforts are largely dependent on the creation of a secure environment. The attackers, whose apparent aim is to undermine the American-led recovery effort and turn Iraqis against the occupation, have struck their most significant blow yet against an increasingly shaky U.S. administration.

An hour after this afternoon’s attack, the atmosphere around the Canal Hotel was marked by chaos and confusion. U.S. troops quickly cordoned off all roads leading to the damaged headquarters, but plumes of smoke could be seen rising from the shattered hulk from a quarter mile away, and a dozen military helicopters swooped low over the scene. At a gathering point of relatives, journalists and curious onlookers, two women screamed and wailed beneath a fierce sun; the husband of one, a clerk for the United Nations Development Program, had been working on the second floor when the bomb went off, and had not been heard from since. Moments later, the women caught sight of the man limping toward them across a field that divided the crowd from the U.N. headquarters; he had suffered only minor injuries. The women reached across a coil of barbed wire toward him, but were driven back by American soldiers, who said they had orders to keep everyone behind their lines. Ambulances continued to carry away the injured for the next two hours, and a trickle of people with minor injuries, many of them splattered in blood, drifted out, ambushed by the dozen or so journalists who had gathered at the scene.

As evening fell upon Baghdad, no group had claimed responsibility for the blast. Suspicion fell upon the remnants of Saddam Hussein’s fedayeen militias, upon shadowy Islamic groups such as Ansar Al-Islam, which has been linked to Al Qaeda, or upon new and unknown guerrilla cells that continue to emerge in the chaos of Iraq. Faced with another catastrophic failure of their security system–one that will almost certainly come in for a major review in coming days–American officials attempted to show a brave face. “I am absolutely certain that instead of running and cutting the United Nations will remain,” Bremer said shortly after today’s blast. “We have to do our best to find these people before they attack to deal with them, and we will.” Bremer’s resolve may be no match for terrorists who have already demonstrated an ability to strike at will.